Title loans are the best answer if you need quick cash. Given that you have a reliable income and a car title. Financial emergencies do happen from time to time and many people see title loans as the easiest and quickest way to get emergency cash. Title loan is considered as a secured loan. We will discuss further the difference between secured and unsecured loans
Secured loans are related to some sort of collateral. It is protected by an asset or property like a car or home and a lien takes place. You can also refinance a title loan in Phoenix even if you have poor credit. However, since borrowers use their property titles to secure the loans, there’s risk that the borrower can lose their properties. In this type of loan, the borrower does not necessarily need to have a good credit to be able to get a loan. This is even good for people who have filed bankruptcy.
This type of loan is the best way to get an ideal amount of money as the lender is not likely to loan higher amount with guarantee that the money will be repaid. Secured loans have usually lower rates compared to unsecured loans as it is from the term itself a “secured” one.
A title loan is one of the best known secured loan and it is a great option to pay unexpected expenses, bills, or any necessity for extra cash. Your own car’s worth can be used to secure your loan, so you can get dollars quickly and good credit is not necessarily needed. And the good thing is, you get to keep driving your vehicle. A title loan is direct to repay.
Examples of Secured Loans:
- Auto Loan (New and Used Cars)
- Recreational Vehicle Loan
- Boat Loan
- Home Equity Line of Credit
- Boat Loan
While unsecured loan is the opposite of secured loans. This is the type of loan which is not connected to any type of property or collateral. This usually involves a credit card purchases, educational loans or personal ones. The interest for unsecured loans are usually considerably high as it is a big risk for lenders as there’s no assets to recover if the borrower failed to pay the debt.
Lenders usually judge borrowers of unsecured loan based on credit score, capacity to pay, character, collateral and conditions
Examples of Unsecured Loans:
- Credit Cards
- Student Loans
- Personal (Signature) Loans
- Personal Lines of Credit
- Educational Loans
- Some Home Improvement Loans
What Is a Lien and How Does a Title Loan with a Lien Work?
A lien is the right to keep possession of assets or property that belongs to another person until the loan owed by that person was cleared. It is commonly known as collateral for payment. It is usually a public record. It is filed with a county records office (for real properties) or with a state agency like the secretary of state. Lien on real estate is an ideal way for lenders to collect what they are owed. On the other hand, liens on personal properties, such as motor vehicles, are not usually used but it could be an effectual way for creditors to collect.
If you are going to sell or refinance your property, you must have the property title. A lien on your home, vehicle, or other features makes your claim unclear. So, to clear the title, you should pay off the lien. Thus, lenders know that writing a lien on your property is a low-cost and almost guaranteed way of collecting what you owe.
Most lenders typically do not check the credit history of borrowers for these loans as it is considered as a secured loan. Lenders only consider the value and condition of the vehicle that is being used to secure the loan. And a lender does not have a lot of requirements. They usually just require government issued ID, proof of income and the car title.
Types of Liens
Here are the several types of liens you might come across.
Consensual liens – this is the type of lien that includes liens you agreed to when you bought something.
Statutory or non-consensual liens – type of lien that is acquired by someone through a court process to put a claim on a property for unsettled bills. Types of statutory liens are the following:
Tax liens – this sort of lien that is placed on the property of a person by local government or federal state for failure to pay taxes.
Contractor’s liens – In this lien, a worker does work for a landowner. The landowner does not pay the contractor, who goes to court to get a lien on the property. If the landowner attempts to sell the property, then the worker’s lien must be paid off alongside with the mortgage.
Judgments – This type of lien is common in lesser claims court cases.
Construction liens may also have filed against the property holder by sub-contractors who have not yet paid by a contractor.
Can You Get a Title Loan with a Lien?
So, what is a title loan with a lien? It is when you are still financing your car, and you are still in the process of paying it. You can use your car for collateral while making payemts in Arizona.Phoenix car registration loans can get you up to $2,500 if you have equity in the vehicle.
As financial difficulty sometimes occurs, more and more people rely on loans. Wondering if you can get a title loan with a lien? Yes, it is possible to some creditors. However, once you are permitted for a title loan with lien still on your vehicle or property, the amount you are approved for is usually used to pay off the lien on the property. After that amount has been allotted for paying off the lien, you will get the rest of the money to use.